Difference Between Trading and
Profit and Loss Account and Income Statement:
Both
income statement and trading and profit and loss
account are prepared to ascertain the net result of
the business concerns. Some business concerns who
have adopted British Accounting System, prepare
trading and profit and loss account to determine the
net result of the business, while some others who
have adopted American Accounting System, prepare
income statement for the same purpose. Different
terms are used under the two systems of accounting.
Some American terms are given below which are
equivalent to British terms.
|
1 |
Bad debts |
1 |
Uncollectible
accounts |
|
2 |
Provision for
doubtful debts |
2 |
Allowances for
doubtful accounts |
|
3 |
Sundry debtors |
3 |
Accounts
receivable |
|
4 |
Sundry
creditors |
4 |
Accounts
payable |
|
5 |
Closing stock
of goods |
5 |
Closing
inventory of merchandise |
|
6 |
Opening stock
of goods |
6 |
Opening
inventory of merchandise |
|
7 |
Gross profit |
7 |
Gross income |
|
8 |
Net profit |
8 |
Net income |
|
9 |
Trading and
profit and loss account |
9 |
Income
statement |
|
10 |
Bills
receivable |
10 |
Notes
receivable |
|
11 |
Bills payable |
11 |
Notes payable |
|
12 |
Capital |
12 |
Owner's equity |
|
13 |
Income |
13 |
Revenue |
|
14 |
Purchases on
credit. |
14 |
Purchases on
account |
|
15 |
Company |
15 |
Corporation |
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